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Nine and a Half Billion of Free Cash FlowWide moat

Gilead Sciences (GILD) — moat facet

Gilead produced $9.5 billion of free cash flow in 2025 and $5.9 billion in the first half of 2026, a half in which it reported an $8.5 billion loss.

Reported profit at Gilead swings; the cash does not. Free cash flow was $9,456 million in 2025 and $10,305 million in 20241, about 32% of revenue in 20252. In 2024, the year of the CymaBay acquisition and the Trodelvy impairments, net income was $480 million3; the cash was twenty times larger.

Gilead free cash flow and net income ($bn)10.3FCF 20240.5NI 20249.5FCF 20258.5NI 20255.9FCF H1 2026-8.5NI H1 2026Gilead Form 10-K FY2025; Q4 2025 and Q2 2026 results releases; bar height is magnitude
Profit swings by billions; the cash does not.

The reason is the nature of the costs that move. Acquired IPR&D and impairments are accounting charges or cash paid for acquisitions; they do not recur in operating cash flow the way salaries and manufacturing do. Operating cash flow was $10,019 million in 2025 and capital spending $563 million4. A business that needs so little capital to grow is valuable even when its income statement looks unstable.

The first half of 2026 shows the same thing in extreme form. Gilead reported a net loss of $8,475 million5 and generated free cash flow of $5,859 million6, more than twice the $2,373 million of the first half of 20257. Stockanalysis puts trailing free cash flow at $12.94 billion, a yield of 7.21% on the market value8.

This is the money that pays the dividend and funds the acquisitions, so it is the number that matters most for an owner.

Taxes help the cash too. Gilead's effective tax rate was 13.1% in 2025 against 30.5% in 20249, and the company says that without the 2026 acquired research charges its tax rate for the year would be about 21%10. At 13.1%, tax took $1,286 million of $9,796 million of pre-tax income in 202511.

If free cash flow falls below $7 billion in a year without an unusual tax or legal payment, the HIV annuity will be paying less than it did.

Moat trajectory: Holding steady

Free cash flow $5,859M in H1 2026 against $2,373M.

The number that tests this moat
Reported
Free cash flow, latest quarter
$3,432M (Q2 2026), from $720M a year earlier; $9,456M for 2025

The cash the franchise produces; below $7bn for a normal year would mean the annuity had weakened.

Source: Gilead Sciences Q2 2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
Cash Was Spent Before It Arrived
Gilead's cash fell from $10.6 billion to $3.2 billion in six months as acquisitions took more than a year of free cash flow.
References
  1. ReportedFree cash flow was $9,456 million in 2025 and $10,305 million in 2024, about 32% of revenue in 2025.
    Gilead Sciences fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - non-GAAP measures, free cash flow, cash and 2026 guidance. — FY2025 · publ. 10 February 2026 · source ↗
  2. Moat Explorer calcFree cash flow was $9,456 million in 2025 and $10,305 million in 2024, about 32% of revenue in 2025.
    Moat Explorer calculation from Gilead Sciences reported figures ($ millions unless stated). HIV and Biktarvy: HIV share of total revenues 20,752 / 29,443 = 70.5% (2025); of product sales 20,752 / 28,915 = 71.8%; 16,438 / 22,449 = 73.2% (2019); 16,315 / 27,305 = 59.8% (2021); 18,175 / 27,116 = 67.0% (2023); 19,612 / 28,754 = 68.2% (2024). Biktarvy share of total revenues 14,334 / 29,443 = 48.7%; of HIV 14,334 / 20,752 = 69.1%; Biktarvy US 11,467 / 14,334 = 80.0%; Biktarvy growth 2025 14,334 / 13,423 - 1 = +6.8%; 2019-2025 14,334 / 4,738 = 3.0 times, (3.03)^(1/6) - 1 = about 20% a year. Other HIV 20,752 - 14,334 = 6,418; HIV other than Biktarvy, Descovy, Genvoya and Odefsey 20,752 - 14,334 - 2,758 - 1,498 - 1,167 = 995; Veklury plus Other plus royalties 911 + 799 + 527 = 2,237. Genvoya 1,498 / 3,931 - 1 = -61.9%. HIV growth 2019-2025 20,752 / 16,438 - 1 = +26.2%, about 4.0% a year; 2021 16,315 / 16,938 - 1 = -3.7%; 2023 18,175 / 17,194 - 1 = +5.7%; 2024 19,612 / 18,175 - 1 = +7.9%; 2025 20,752 / 19,612 - 1 = +5.8%, about 6%; H1 2026 10,723 / 9,675 - 1 = +10.8%; Q2 2026 5,693 / 5,088 - 1 = +11.9%. Descovy 2025 2,758 / 2,113 - 1 = +30.5%, about 31%; Q2 2026 967 / 653 - 1 = +48.1%; Descovy over Yeztugo Q2 2026 967 / 232 = 4.2, about four times. Yeztugo Q1 2026 = H1 397 - Q2 232 = 165; Yeztugo over Biktarvy H1 2026 397 / 7,133 = 5.6%, about 6%. US HIV 16,904 / 20,752 = 81.5%, about 81%; US product sales 20,816 / 28,915 = 72.0%; Europe 4,617 / 28,915 = 16.0%. Gilead HIV growth Q2 2026 +11.9% less ViiV +11% = about +1 point. Exclusivity: Descovy + Vemlidy + Odefsey 2,758 + 1,070 + 1,167 = 4,995, about $5.0bn, / 29,443 = 17.0% of revenue; Descovy + Vemlidy 2,758 + 1,070 = 3,828; Vemlidy share of Liver Disease 1,070 / 3,217 = 33.3%, a third; 2025 sales by primary US patent window: Tecartus 344 + Genvoya 1,498 = 1,842 (2027-2029); Trodelvy 1,397 + Descovy 2,758 + Vemlidy 1,070 + Odefsey 1,167 + sofosbuvir/velpatasvir 1,272 = 7,664 (2028-2033); Biktarvy 14,334 (2036). Hepatitis C 2015 Harvoni 13,864 + Sovaldi 5,276 = 19,140, / product sales 32,151 = 59.5%, about 60%; product sales 2018 21,677 / 32,151 - 1 = -32.6%; Liver Disease 2025 3,217 / 19,140 = 16.8%, about 17%, a sixth. Liver Disease 2019 HCV 2,936 + HBV/HDV 742 = 3,678; 2020 2,064 + 860 = 2,924. Price: gross product sales 2025 28,915 + 19,953 = 48,868, about $48.9bn; 2024 28,610 + 17,776 = 46,386; net product sales growth 28,915 / 28,610 - 1 = +1.1%, about 1%; gross-to-net deductions 19,953 / 17,776 - 1 = +12.2%; accrued rebates 4,337 / 3,892 - 1 = +11.4%, about 11%; rebates and chargebacks over net product sales 17.5bn / 28,915 = 60.5%, about 60% (2025); 15.5bn / 28,610 = 54.2% (2024). H1 2026 capital expenditure = operating cash flow 6,117 - free cash flow 5,859 = 258. Three wholesalers 29% + 24% + 21% = 74% of gross product sales (2025); 29% + 23% + 21% = 73% (2024). Hepatitis C share of revenue 1,272 / 29,443 = 4.3%, about 4%; sofosbuvir/velpatasvir 2025 1,272 / 1,596 - 1 = -20.3%, a fifth; Mavyret 1,317 / 1,311 - 1 = +0.5%. Cash and capital: free cash flow over revenue 9,456 / 29,443 = 32.1%, about 32%; dividends paid over free cash flow 4,003 / 9,456 = 42.3%, about 42%; free cash flow left after dividends and buybacks 9,456 - 4,003 - 1,922 = 3,531. Dividend per share (3.16 / 1.29)^(1/10) - 1 = 9.4% a year; increases 1.84 / 1.29 - 1 = +42.6% (2016); 2.72 / 2.52 - 1 = +7.9% (2020); 3.00 / 2.92 - 1 = +2.7% (2023); 3.08 / 3.00 - 1 = +2.7% (2024); 3.16 / 3.08 - 1 = +2.6% (2025); quarterly 0.82 / 0.79 - 1 = +3.8% (2026). Buybacks 2015-2016 10,002 + 11,001 = 21,003, about $21bn; year-end market value 2016 over 2015 94.34 / 145.83 - 1 = -35.3%, about a third. Net debt 31 December 2025 = total debt 24,937 - cash and marketable debt securities 10,605 = 14,332; 30 June 2026 = 26,246 - 3,179 = 23,067; net debt over 2025 free cash flow 23,067 / 9,456 = 2.4 years. Interest over operating income 1,024 / 10,022 = 10.2%, about a tenth (2025); 977 / 1,662 = 58.8%, more than half (2024). Gilead stockholders equity 11,829 / 22,703 - 1 = -47.9%, about 48%; return on equity 2025 8,510 / ((19,330 + 22,703) / 2 = 21,017) = 40.5%. Acquisitions: Trodelvy IPR&D impairments 2.7bn (2022) + 2.4bn + 1.8bn (2024) + 1.75bn (2026) = 8.65bn of 15.8bn recorded = 54.7%; Trodelvy Q1 2026 = H1 859 - Q2 457 = 402; Kite plus Immunomedics 11,155 + 20,600 = 31,755, over $31bn; cell therapy 2025 1,839 / 1,973 - 1 = -6.8%; Arcellx IPR&D 7.0bn / cell therapy 2025 1.839bn = 3.8 years. Acquired IPR&D 2019 5,051 + 2020 5,856 + 2021 939 + 2022 944 + 2023 1,155 + 2024 4,663 + 2025 1,024 + H1 2026 11,290 = 30,922, about $30.9bn; acquired IPR&D 2019-2025 alone = 30,922 - 11,290 = 19,632; Biktarvy 2025 US 11,467 + outside US 1,676 + 1,190 = 14,334, all other revenues 29,443 - 14,334 = 15,109 (shown 15.1); net income 2019-2025 5,386 + 123 + 6,225 + 4,592 + 5,665 + 480 + 8,510 = 30,981, about $31.0bn. Revenue lines: Liver Disease share 3,217 / 29,443 = 10.9%, about 11%; Oncology share 3,236 / 29,443 = 11.0%; Oncology 2020 cell therapy 607 + Trodelvy 49 = 656; Oncology 2025 3,236 / 3,289 - 1 = -1.6%, about 2%; 2019-2025 3,236 / 456 = 7.1 times, about sevenfold. Veklury 2021 5,565 / 27,305 = 20.4%, about a fifth; 2025 911 / 29,443 = 3.1%; product sales 2021-2025 28,915 / 27,008 - 1 = +7.1%; excluding Veklury (28,915 - 911 = 28,004) / (27,008 - 5,565 = 21,443) - 1 = +30.6%, about 31%. Other product sales plus royalty, contract and other revenues: 1,547 + 330 = 1,877 (2019); 1,026 + 334 = 1,360; 1,027 + 297 = 1,324; 946 + 299 = 1,245; 859 + 182 = 1,041; 889 + 144 = 1,033; 799 + 527 = 1,326 (2025). Bands sum to total revenues: 2025 20,752 + 3,217 + 3,236 + 911 + 1,326 = 29,442 against reported 29,443 (rounding); 2019 16,438 + 3,678 + 456 + 0 + 1,877 = 22,449. Non-HIV revenue 29,443 - 20,752 = 8,691, / 29,443 = 29.5%. Valuation and earnings: trailing twelve months to June 2026 revenue 29,443 - H1 2025 13,749 + H1 2026 14,763 = 30,457; net income 8,510 - 3,275 + (-8,475) = -3,240; diluted EPS 6.78 - 2.61 + (-6.82) = -2.65. Year-end market value over net income and revenue: 2015 145.83bn / 18,108 = 8.05, / 32,639 = 4.47; 2016 94.34 / 13,501 = 6.99, / 30,390 = 3.10; 2017 93.58 / 4,628 = 20.2, / 26,107 = 3.58; 2018 80.92 / 5,455 = 14.8, / 22,127 = 3.66; 2019 82.21 / 5,386 = 15.3, / 22,449 = 3.66; 2020 73.03 / 123 = 594, / 24,689 = 2.96; 2021 91.08 / 6,225 = 14.6, / 27,305 = 3.34; 2022 107.68 / 4,592 = 23.4, / 27,281 = 3.95; 2023 100.94 / 5,665 = 17.8, / 27,116 = 3.72; 2024 115.12 / 480 = 240, / 28,754 = 4.00; 2025 152.28 / 8,510 = 17.9, / 29,443 = 5.17; October 2026 179.47bn / 30,457 = 5.89. 2026 product sales guidance midpoints (29,600 + 30,000) / 2 = 29,800 (February); (30,000 + 30,400) / 2 = 30,200 (May); (30,100 + 30,400) / 2 = 30,250 (August). Non-GAAP EPS guidance midpoint (-0.65 + -0.30) / 2 = -0.475, plus 9.08 of acquired IPR&D and tax per share = 8.61. Additional: dividends paid 3,918 / 3,809 - 1 = +2.9% (2024), 4,003 / 3,918 - 1 = +2.2% (2025); gross product sales 48,868 / 46,386 - 1 = +5.4%, about 5%; Epclusa 1,966 / 3,510 - 1 = -44.0%; US HIV over US product sales 16,904 / 20,816 = 81.2%; European HIV over European product sales 2,392 / 4,617 = 51.8%; analyst target 158.65 / 144.74 - 1 = +9.6%, about 10%; market value 2025 over 2024 152.28 / 115.12 - 1 = +32.3%, a third. AmBisome 509 / 533 - 1 = -4.5%. Biktarvy over HIV: 4,738 / 16,438 = 28.8% (2019); 8,624 / 16,315 = 52.9% (2021); 11,850 / 18,175 = 65.2% (2023). Descovy + Vemlidy + Odefsey: 1,500 + 488 + 1,655 = 3,643 (2019); 1,700 + 814 + 1,568 = 4,082 (2021); 1,985 + 862 + 1,350 = 4,197 (2023); 2,113 + 959 + 1,288 = 4,360 (2024). Apretude Q1 2026 = H1 260 - Q2 140 = 120 (GBP M). Livdelzi Q1 2026 = H1 300 - Q2 167 = 133 - cash, capital returns, debt, acquisitions and valuation. — FY2015-Q2 2026 · publ. October 2026 · source ↗
    Method: Arithmetic on figures reported in Gilead Sciences Forms 10-K, 10-Q and results releases, SEC XBRL, stockanalysis.com market values, and the GSK and AbbVie filings cited; each operand is stated in the source line.
  3. ReportedIn 2024, the year of the CymaBay acquisition and the Trodelvy impairments, net income was $480 million; the cash was twenty times larger.
    Gilead Sciences Form 10-K for 2025 - financial statements, MD&A and notes: income, margins, impairments, acquired IPR&D, cash flow, capital returns and debt. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedOperating cash flow was $10,019 million in 2025 and capital spending $563 million.
    Gilead Sciences fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - non-GAAP measures, free cash flow, cash and 2026 guidance. — FY2025 · publ. 10 February 2026 · source ↗
  5. ReportedGilead reported a net loss of $8,475 million and generated free cash flow of $5,859 million, more than twice the $2,373 million of the first half of 2025.
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - income statement, EPS, cash flow, balance sheet and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  6. ReportedGilead reported a net loss of $8,475 million and generated free cash flow of $5,859 million, more than twice the $2,373 million of the first half of 2025.
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - income statement, EPS, cash flow, balance sheet and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  7. ReportedGilead reported a net loss of $8,475 million and generated free cash flow of $5,859 million, more than twice the $2,373 million of the first half of 2025.
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - income statement, EPS, cash flow, balance sheet and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  8. Third-party estimateStockanalysis puts trailing free cash flow at $12.94 billion, a yield of 7.21% on the market value.
    stockanalysis.com, Gilead Sciences statistics, 2 October 2026: market value $179.47bn, enterprise value $200.84bn, 1.24 billion shares, no trailing P/E (loss), forward P/E 15.86, P/S 5.89, P/B 15.18, trailing free cash flow $12.94bn, institutions 91.13%. — October 2026 · publ. 2 October 2026 · source ↗
  9. ReportedGilead's effective tax rate was 13.1% in 2025 against 30.5% in 2024, and the company says that without the 2026 acquired research charges its tax rate for the year would be about 21%.
    Gilead Sciences Form 10-K for 2025 - financial statements, MD&A and notes: income, margins, impairments, acquired IPR&D, cash flow, capital returns and debt. — FY2025 · publ. 24 February 2026 · source ↗
  10. ReportedGilead's effective tax rate was 13.1% in 2025 against 30.5% in 2024, and the company says that without the 2026 acquired research charges its tax rate for the year would be about 21%.
    Gilead Sciences second-quarter 2026 results release, Form 8-K exhibit 99.1 - revenue by product, income statement, cash flow, balance sheet, pipeline updates and 2026 guidance - income statement, EPS, cash flow, balance sheet and 2026 guidance. — Q2 2026 · publ. 4 August 2026 · source ↗
  11. ReportedAt 13.1%, tax took $1,286 million of $9,796 million of pre-tax income in 2025.
    Gilead Sciences Form 10-K for 2025 - Item 1 business and the revenue-by-product table: products, programs, employees and manufacturing. — FY2025 · publ. 24 February 2026 · source ↗
Sources
Generated October 4, 2026